Porsche plans to cut 1,900 jobs

Porsche plans to cut around 1,900 jobs in Germany by 2029, following a decline in sales of its electric vehicles and expectations of reduced profits this year. Last week, the company announced its projected profit margins for 2024, ranging between 10% and 12%, significantly lower than its long-term target of 20%.

Porsche has revealed plans to launch new vehicles powered by internal combustion engines (ICE) and plug-in hybrid electric vehicles (PHEV) in response to these challenges. The company also warned that developing these new models and related battery projects will cost an additional 800 million euros by 2025.

The company indicated that the current situation is more challenging than anticipated, attributing the job cuts to "difficult geopolitical and economic conditions." These reductions will take place at its factories in Zuffenhausen and Weissach, with approximately 15% of the workforce being cut. The layoffs are expected to be carried out voluntarily through programs such as early retirement and severance packages, while the job security agreement for employees in Germany remains in effect until 2030.

Porsche also announced its intention to adopt a "restrictive approach" to hiring in the coming years, signaling an expected slowdown in growth.

This comes amid a 3% decline in Porsche"s global deliveries last year, driven by a sharp drop in China, one of its most profitable markets in recent years.

In a related context, reports from the German newspaper Handelsblatt suggested that other brands owned by Volkswagen may follow Porsche"s lead by increasing production of internal combustion and hybrid vehicles.